On the drivers of BNDES credit to Brazilian state governments
Journal of Financial Economic Policy
ISSN: 1757-6385
Article publication date: 2 January 2019
Issue publication date: 3 May 2019
Abstract
Purpose
This paper aims to address the discussion on the credit disbursement of US$28.6bn from Brazilian National Economic and Social Development Bank (BNDES) to Brazilian state governments during the period from 2009 to 2014. They try to identify the main drivers of the credit allocation in both cross state and time.
Design/methodology/approach
The authors use a dynamic balanced panel to estimate the role of technical and socioeconomic variables.
Findings
The results suggest that the states’ need for financing via BNDES exhibits neither inertial nor explosive behavior. The authors find an efficiency elasticity of this resource of 0.20. In addition, the impact of a positive change in the state fiscal status leads to an increase of 2.5 per cent in the indebtedness capacity. Finally, they find that wealthier states are more successful in demanding credit from BNDES.
Practical implications
This analysis of resource allocation is useful for modeling the determinants of international financial institutions as central planners. The authors also invite researchers to discuss the decision-making processes that characterize the federative pact in Brazil.
Originality/value
Although a burgeoning body of literature has examined the role of BNDES as a creditor institution for firms, its relationship with the public sector, in special subnational governments, has been rarely studied.
Keywords
Acknowledgements
This paper was ranked third in the X SOF Award in Brazil. Special thanks to organizing committee of X SOF Award. For helpful comments on earlier drafts, the authors thank Cezar Santos, Claudia Passador, Guilherme Irffi, José Pagnussat, Manoel Bosco, Marcelo Callado, Marx Weber, Pedro Veloso and anonymous referees. Also, they thank XII Luso-Brasilian Finance Meeting and other conference participants. Matos gratefully acknowledge financial support from CNPq-Brazil. All erros are the authors’.
The authors of this article have not made their research dataset openly available. Any enquiries regarding the dataset can be directed to the corresponding author.
Citation
Matos, P.R.F. and de Jesus Filho, J. (2019), "On the drivers of BNDES credit to Brazilian state governments", Journal of Financial Economic Policy, Vol. 11 No. 2, pp. 283-302. https://doi.org/10.1108/JFEP-06-2018-0088
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited